Microsoft Says No Profit In Vista-XP Downgrades

CWmike writes "Microsoft has denied that it makes money when users 'downgrade' Windows Vista to XP, as a lawsuit filed last week alleges. The lawsuit, submitted last week, stems from the $59.25 fee that a California woman was charged in mid-2008 when she bought a Lenovo laptop and downgraded from Vista to XP. In fact, it's computer makers, not Microsoft per se, that charge users the additional fees for downgrading a new PC from Vista to XP at the factory. For example, Dell Inc. adds an extra $20 to the price to downgrade a PC. However, Microsoft may profit from the way it structures downgrade rights."

Re:Of course they are making money

[jellomizer]

Yes, but Windows use to be Microsoft Turkey that the Gravy just made better.
Back in them olden days of the 1990's People wanted to get the latest and greatest versions of DOS/Windows. Now today people are not jumping threw hoops. I have been at Big companies who require Windows 2000 still.

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Re:Of course they are making money

[Peter Simpson]

Why would you use two licenses? You never used Vista, and downgraded to XP. AND - you already paid (through the "Microsoft tax") for the Vista license, which should cost more than an XP license.

It all comes down to what image Dell copies to the hard drive as they build the PC. It should cost no more to write an XP image than to burn a Vista image, and only one license is ever used.

Re:Of course they are making money

[Taimat]

Not 2 licenses... At my company, we build clones for our customer - with Vista, but we downgrade them all to XP. It's just 1 license. According to M$FT, They will not provide you with Media (you need your own XP media) or a license key (you reuse a key you have). When you go to activate, (if you didn't use a non-activation code) you have to explain to the rep that you are using your downgrade rights, and they will provide a new machine code for activation (not a new key). Vista Ultimate and Vista Business can be downgraded to XP in this manner.

Re:I'm Confused

[Vancorps]

Actually yes, buying Vista does give you a license to XP Pro, or 2000 Professional, or NT4 Workstation.

The problem is that Microsoft doesn't maintain this policy on the home side of the fence. If you buy a business OS you can downgrade all you want which is why my volume license for Windows includes keys for even Windows 2000. NT4 is considered EOL so they don't give you keys for it anymore.

Microsoft just needs to do the same thing on the home side to be consistent. These days companies all over seem to want to make money by nickel and diming customers through licensing. I just got off the phone with VMWare and their licensing model is so screwed up they didn't give me what I ordered despite them producing the quote to begin with based on my specifications. I've had the same thing happen with Oracle, and NetApp. It makes good financial sense from a bean counter perspective but it means that you now have to have dedicated licensing personnel which is annoying to say the least.

Re:I'm Confused

[claytonjr]

Does buying a PS3 give you a free PS2?

Yes?

Only when you purchase the older 60 gig model.

Re:So making a profit is illegal now?

[Abreu]

One more time, with feeling!

Microsoft demands that you pay for the upgrade to Windows Vista Business in order to give you "downgrade rights" to install Windows XP

This is why there's a lawsuit

Only certain Vista titles are eligible for down...

[Ruger]

...grade. An XP "downgrade" can only be purchased with a Business or Ultimate version of Vista. So if a customer is looking at a configure-to-order laptop such as with Dell or Lenovo, then in many cases customers have to upgrade their OS from Home Basic or Home Premium in order to get the XP downgrade option.

Is this charging more for XP...in many people's minds, yes. But legally (Full disclosure: IANAL), they are paying for the Vista upgrade, not for the XP downgrade.

Re:Of course they are making money

[Anonymous Coward]

You mean "through" hoops? Unless you're an acrobat I doubt you're throwing it and then jumping through it.

Re:Customization cost

[ramsejc]

My experience with XP Downgrades is with Lenovo, HP, and Dell.

Lenovo and HP gave me XP downgrades for free (I did have to cover the shipping, like $8 or something.) They said there was no cost, because the Vista Business and Ultimate EULA grants me permission to downgrade without buying an XP license.

Then, I tried to downgrade a Dell that my friend owns. It has Vista Home Premium, and Dell said the same thing - if it was Ultimate or Business, it would be free, since it is not, I have to buy and install a retail copy of XP. Apparently, the EULA is different when it comes to XP Downgrade rights. Dell also told me they do not even make any XP based restore images for their Vista Home computers. All of their Vista Home PCs have to use a retail XP disc if you want to downgrade.

The other thing that Dell told me was that they entered into an agreement with MS in which they will not give away or make available XP downgrades to customers who purchased a Vista PC prior to fouth quarter 2008, and IIRC, this was regardless of which version of Vista was preloaded.

The part that really makes me mad, is that when she bought the PC, she bought it from Dell directly, not through a retail channel of any kind. I advised her to stick with XP, and the Dell salesman talked her into buying with Vista, saying that she can always downgrade later if she does not like it.

Re:Of course they are making money

[mysticgoat]

Since I'm not going to RTFA as I've moved on to Ubuntu, perhaps someone can clarify this for me:

• Microsoft makes no money off of Vista -> WinXP downgrades.
• The downgrade option is part of high end Business Vista packages.
• The downgrade option is not part of the Home Vista packages
• Most computers that are downgraded from Vista to WinXP are mid and low end models that come with the Home Vista package
• When a purchaser of a computer with the Home Vista package wants to downgrade to WinXP, the OEM therefore has to sell him the upgrade to a Business Vista package that is then immediately downgraded to WinXP
• Microsoft gets significant money from all upgrades of Home Vista packages to Business Vista packages
• Plus, it looks good on the reports that so many people who buy Home Vista immediately see an advantage to upgrading to Business Vista.

Did I get that right? Shades of Milo Minderbender! Microsoft has developed the digital equivalent of buying eggs in Cairo for 12 cents a dozen and selling them in Rome at 11 cents a dozen at a profit (because they first bought them at 9 cents a dozen in Athens before shipping them to Cairo)...

I am really glad that Ubuntu got good enough to use fast enough that I could walk away from the Microsoft culture before it sank this deep in Catch 22 logical fruit loops.

Is Vista still that bad?

[donstenk]

Really, I don't hear many complaints anymore and I see more and more people with computers with a black task bar and transparant title bars. I assumed that after the service pack it would be allright and that system requirements had reached the required level.

Re:Of course they are making money

[Tenebrousedge]

That is not true.

See the following:
http://download.microsoft.com/download/d/2/3/d23b9533-169d-4996-b198-7b9d3fe15611/downgrade_chart.doc [microsoft.com]

http://download.microsoft.com/download/2/8/6/2860872a-35dc-4a10-8617-3927aacd189a/downgradeOEMversion-020707.pdf [microsoft.com]

For OEM and End User licenses, Vista Business and Ultimate alone have downgrade rights, and the list of what they may be downgraded to is short.